Tumi Holdings (TUMI) Shares Rally on Possible Samsonite Takeover

Shares of Tumi Holdings Inc. (TUMI) were trading up +8.02 or +39.84 percent to $28.10 in Thursday’s premarket after news that the company was nearing a deal for its acquisition by Samsonite International SA. Tumi Holdings Inc. stock closed at $20.13 per share, up +0.33 or +1.67 percent in Wednesday’s regular trading session.

South Plainfield, New Jersey based Tumi Holdings Inc. was founded in 1975 by Charlie Clifford after he served in the Peace Corps in Peru.
The company is known for its black on black ballistic nylon luggage and accessories such as pens, belts and electronic equipment. Tumi was acquired for $276 million by Doughty, Hanson & Co., a private equity firm based in London. Tumi Holdings Inc. had its initial public offering in April of 2012. The company operates in four divisions which include Direct-to-Consumer North America, Indirect-to-Consumer North America, Direct-to-Consumer International and Indirect-to-Consumer International.

Founded in 1910 as the Schwayder Trunk Manufacturing Company in Denver, Colorado, Mansfield, Massachusetts based Samsonite International S.A is the world’s largest luggage manufacturer. The company began using the Samsonite trademark in 1941 and changed its name to Samsonite in 1966. Samsonite International is known for producing a number of major luggage brands including American Tourister, High Sierra, Hartmann Luggage and Speck Products in addition to its Samsonite namesake brand. Samsonite has been bought and sold a number of times and raised $1.25 billion in an initial public offering in Hong Kong in June of 2011. The company has a registered office in Luxembourg and its stock is listed on the Hong Kong Stock Exchange.

According to a report in the Wall Street Journal yesterday citing anonymous sources familiar with the matter, the two companies could announce a deal as early as this week. Samsonite stock was suspended from trading on the Hong Kong Stock Exchange yesterday after falling -1.1 percent and recovering its losses. The company did not give a reason for the trading halt.

While exact terms of the deal were not yet available, Tumi Holding Inc. could be valued as high as $2 billion based on the company’s current $1.4 billion market value and a “typical premium”, according to the Journal. A spokesman for Samsonite declined to comment on the matter, while calls to Tumi’s public relations department were not answered outside of normal U.S. business hours.

Tumi Holdings reported earnings for its most recent quarter on February 24th. The company reported earnings per share of $0.38 versus $0.35 per share in the same period one year ago. Revenue came to $167.66 million. Analyst expected the company to report earnings per share of $0.32 on revenue of $164.37 million.

Tumi Holdings stock has gained significantly in this morning’s premarket, rallying from $23 per share to about $28 per share. The stock will open well above its previous 52-week high of $25.47 per share. Tumi shares could trade higher today as speculation on the takeover price has already added significant volatility in premarket trading.

Other News About TUMI

Tumi Stock Jumps on Earnings Beat

Stock gained over six percent after releasing earnings last week.

Tumi Holdings, Inc. – Value Analysis (NYSE:TUMI) : February 18, 2016

Capitalcube’s analysis compares the valuation of major competitors including Coach Inc, Nordstrom Inc. and others.
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Published on Mar 3, 2016
By Jay Hawk
Jay Hawk
Jay Hawk enjoyed a 12-year professional financial markets career incorporating extensive first hand futures and options experience obtained by trading in the stock, commodity and forex markets on U.S. exchanges. Since retiring as a full-time financial market professional, he has been actively trading stock, commodities, forex and options for his own account and managing funds for others, as well as writing financial market commentary and educational articles.

Copyrighted 2020. Content published with author's permission.

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